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Public Expenditure and Economic Growth in Nigeria: Evidence From Auto-Regressive Distributed Lag Specification

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  • Tajudeen Egbetunde Ismail O. Fasanya

    (Fountain University, Department of Economics and Financial Studies, College of Management and Social Sciences, Osogbo, Nigeria University of Ibadan, Department of Economics, Ibadan, Nigeria)

Abstract

This paper analyses the impact of public expenditure on economic growth in Nigeria during the period 1970 to 2010 making use of annual time series data. The study employs the bounds testing (ARDL) approach to examine the long run and short run relationships between public expenditure and economic growth in Nigeria. The bounds test suggested that the variables of interest put in the framework are bound together in the long-run. The associated equilibrium correction was also signifi cant confi rming the existence of long-run relationships. Our fi ndings indicate the impact of total public spending on growth to be negative which is consistent with other past studies. Recurrent expenditure however was found to have little signifi cant positive impact on growth. Therefore, government should increase its spending on infrastructure, social and economic activities. JEL Classification: C51, H50

Suggested Citation

  • Tajudeen Egbetunde Ismail O. Fasanya, 2014. "Public Expenditure and Economic Growth in Nigeria: Evidence From Auto-Regressive Distributed Lag Specification," Zagreb International Review of Economics and Business, Faculty of Economics and Business, University of Zagreb, vol. 17(2), pages 45-58, November.
    • Handle: RePEc:zag:zirebs:v:17:y:2014:i:2:p:45-58
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    References listed on IDEAS

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    More about this item

    Keywords

    Public Spending; Economic Growth; ARDL Cointegration; Nigeria;
    All these keywords.

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General

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